Wellington, December 20, 2024: New Zealand has entered a recession, with the economy contracting by 1.0% in the third quarter of 2024, following a revised 1.1% decline in the second quarter. The downturn is primarily due to high inflation, tight monetary policies, and a slowdown in key sectors such as manufacturing, utilities, and construction. Inflation has reduced consumer spending, and the Reserve Bank of New Zealand (RBNZ) has raised interest rates, further affecting economic activity.
The decrease in both consumer and government spending has intensified the slowdown. The government and RBNZ are focused on addressing the causes and have emphasized fiscal discipline and economic growth. Finance Minister Nicola Willis acknowledged the challenges but affirmed the government’s commitment to recovery.
The RBNZ is expected to continue adjusting its monetary policy, with interest rate cuts anticipated to support the recovery. Despite the challenges, certain sectors show signs of resilience, and ongoing measures aim to stabilize the economy and promote growth.
